Democrats Seek Probe Into U.S. Oil and Gas Mergers
Nearly 50 Democratic Senators and Representatives are urging the Federal Trade Commission (FTC) to investigate the recent mergers in America’s oil and gas sector amid concerns that they would harm competition and hurt consumers. In a letter to FTC chair Lina Khan, the Democratic Members of Congress, led by Senate Majority Leader Chuck Schumer, wrote that the recent wave of oil and gas industry consolidation “threatens competition in the industry and could lead to higher prices and fewer choices for businesses across the supply chain, suppress worker wages, and make heating, cooling, and gas at the pump more expensive for consumers.” The lawmakers urge the FTC to fully investigate the announced mergers and oppose any acquisitions if it determines them to be in violation of antitrust law. “Contrary to disinformation spread by industry groups, these deals are not about efficiency, international competitiveness, or lowering costs; they are designed to pump more profits out of Americans’ pockets – plain and simple,” the Democratic Members of Congress wrote in the letter. “Fossil fuel companies have overwhelmingly identified investor pressure as the reason to keep prices high so they can continue to benefit from record profits. Americans are paying the price for Big Oil’s greed and are still struggling to keep up with gas prices higher than prepandemic levels.” Last year, Democrats had already raised the issue with the FTC when ExxonMobil and Chevron announced their respective mega deals. In November, Democratic lawmakers urged the antitrust regulator to “carefully consider all of the possible anticompetitive harms that these acquisitions present,” referring to Exxon’s proposed $60 billion acquisition of Pioneer Natural Resources and Chevron’s proposed $53 billion acquisition of Hess Corporation. Since Exxon and Chevron announced the acquisitions, many other companies, large and small, have entered into M&A deals, including Occidental and Chesapeake. The value of global upstream mergers and acquisitions this quarter is the highest first quarter since 2017, driven by frenzied consolidation in the U.S. shale patch, analysts told Reuters last month. Industry executives and analysts expect the consolidation drive in the U.S. oil and gas sector to continue amid high stock values and the desire of many firms to get their hands on more inventory for production in the top shale basin, the Permian.
ONGC Approves Rs 990 million Investment In Newly Created Green Arm
India’s largest oil and gas producer Oil and Natural Gas Corp., has approved a Rs 990 million equity investment in its newly created wholly-owned subsidiary ONGC Green Ltd. The company’s board has also accorded in-principle investment approval in additional equity of Rs 11 billion in ONGC Green, according to an exchange filing. This additional investment would be at a later date in furtherance of its business expansion, it said. ONGC Green ONGC Green Ltd. was incorporated as a wholly-owned subsidiary of ONGC on Feb. 27 to pursue renewable energy, bio-fuels, green hydrogen, and carbon capture projects. It is proposed to be engaged in renewable energy spaces like solar, wind, hyrbid, hydel, tidal and geothermal. It will also engage with renewable energy sources like biofuels and biogas, green hydrogen and its derivatives like green ammonia and green methanol. ONGC also stated that the company will also be involved in storage, carbon capture utilisation and storage, and the liquified natural gas business. The company was set up with an authorised capital of Rs 10 billion; the company subscribed to 1 million shares of face Rs 10, which is 100% of ONGC Green’s shareholding.
IGX sees 324% growth in gas trade volumes in February m-o-m
The Indian Gas Exchange (IGX) traded 6,136,850 MMBtu (~155 MMSCM) gas volume in February, with 324 percent month-on-month (m-o-m) increase and 17 percent year-on-year (y-o-y) increase. In February 2024, IGX traded record 4.74 Million MMBtu (120 MMSCM) of monthly R-LNG volumes, said IGX on Tuesday. A total of 101 trades were executed during the month. The maximum number of trades were executed in monthly contracts (62 trades), followed by weekly and fortnightly contracts of 20 and 10 trades, respectively. The most active delivery point for free market gas was Hazira. This was the first month when Hazira became the most active delivery point. Other trading delivery points were — Dabhol, Gadimoga, Dahej, Ankot, Suvali, Mhaskal & KG Basin. During the month, the Exchange traded gas deliveries were 11,06,000 MMBtu (~1 MMSCMD). GIXI at $10.7 per MMBtu in Feb: IGX GIXI (Gas Index of India) for February 2024 was Rs 888/$10.7 per MMBtu, lower by 11% last month. GIXI- South was Rs. 798/$9.6 per MMBtu and GIXI-West Rs 891/$10.7 per MMBtu. Different spot gas benchmark prices recorded were: HH at ~$2/MMBtu, TTF at ~$8.1 /MMBtu, whereas LNG benchmark indices were: WIM ~9.1 $/MMBtu. IGX currently offers delivery-based trade in six different contracts such as Day-Ahead, Daily, Weekday, Weekly, Fortnightly and Monthly, under which the trade can be executed for six consecutive months. The gas trade takes place at multiple delivery points, such as, Dahej, Hazira, Ankot, Mhaskal, Bhadhbhut, Dabhol, KG Basin, Gadimoga, Suvali. It covers six regional gas hubs, namely, Western Hub, Southern Hub, Eastern Hub, Central Hub, Northern Hub, and North Eastern Hub across India.
OPEC expects share of Indian oil imports to rise again
OPEC is set to win a bigger share of India’s oil imports in coming decades due to the proximity of its supplies, the producer group’s head told Reuters, after its dominance was recently eroded by competition from discounted Russian oil. The share of oil from the Organization of the Petroleum Exporting Countries (OPEC) imported by India declined from about 65% in 2022 to 50% last year, according to industry data, after New Delhi became the biggest buyer of seaborne Russian crude in the aftermath of Moscow’s invasion of Ukraine. OPEC members and other producers must adapt to changing market dynamics due to the “redirection” of trade flows since early 2022, with more Russian oil supply to India and elsewhere in Asia, Haitham Al Ghais, OPEC’s secretary general, said in an emailed response to Reuters questions. “OPEC Middle East producers remain ideal suppliers to the Indian market, given their close proximity. It is a perfect supplier-consumer fit, and cost efficient for all parties,” Al Ghais said, adding he sees a greater role for OPEC members in India’s development beyond oil. OPEC supplied 54% of India’s imported oil in January, according to industry sources. “We expect levels to rise further in the coming decades as India’s economic development continues,” Al Ghais said, adding that “many” national oil companies from OPEC members plan to invest in India’s refining sector. India plans to expand refining capacity to 9 million barrels per day (bpd) by 2030, from 5.02 million bpd currently. India, the world’s third-biggest oil importer and consumer, is forecast by the International Energy Agency to be the world’s biggest oil demand growth driver through 2030.
IOC to make fuel for Formula 1 – first by an Indian firm
Indian Oil Corporation Ltd (IOC) – the nation’s top oil firm – will in three months start manufacturing fuel used in adrenaline-pumping Formula One or F1, motor racing as it looks to expand its basket of niche fuels. IOC, which already has three branded fuels, including high-selling XtraGreen diesel, on Wednesday unveiled ‘Storm’ petrol that it will supply for the Asian region motorcycle road racing championship. “Today, we are partnering with FIM Asia Road Racing Championship for the supply of ‘Storm’. We are the first company in India to manufacture fuel of specifications used in road racing,” IOC Chairman Shrikant Madhav Vaidya said. IOC will supply fuel for all the motorcyclists from 15 countries that will participate in the FIM Asia Road Racing Championship. “Our R&D (research and development) in two months will be able to produce Category-1 fuel and in three months Formula 1 fuel,” he said. “Unless we go to F1, the journey is not complete.” ‘Storm – Ultimate Racing Fuel’ is different from regular commercial as well as premium gasoline or petrol (95-Octane XP95 and 100-Octane XP100) in fuel properties like density range, distillation range, vapour pressure (DVPE), and olefins. And Formula 1 fuels are ones that deliver highly optimised peak performance. Vaidya said current norms provide for 40 per cent of the F1 fuel coming from non-fossil sources, such as alcohol, algae or waste keeping in the sustainability angle. IOC would also start manufacturing similar grade fuel and thereafter pitch to automobile makers racing in F1. Unlike FIM Asia Road Racing Championship where there is one single fuel supplier for all the motorcycles racing, F1 allows teams to select their own fuel supplier. For instance, Shell is the fuel supplier to Ferrari. “This is just the beginning,” Vaidya said. ‘Storm – Ultimate Racing Fuel’ provides cleanliness of engine parts, fuel delivery system and corrosion protection to the metallic parts of vehicles. It provides faster acceleration, more power, smoother drivability, lower engine deposits and lower exhaust emissions. It is suitable for use in all racing championships (enduro, trial, circuit racing, motocross and supermoto, cross-country, e-bike, and track racing) in all classes of motorbikes requiring FIM Category 2 race fuels. F1 fuel will be a notch higher. It would fall under high octane premium road fuel with octane thresholds of 95 to 102.